Avon Plans to Cut 650 Jobs as McCoy Seeks to Trim Costs
Avon Products Inc. (AVP), the world’s largest door-to-door cosmetics seller, plans to cut 650 jobs as part of its plan to trim $400 million in costs.
The cuts and other actions, which will be completed next year, will result in charges of as much as $45 million before taxes, with about $35 million recorded in the fourth quarter of 2013, the New York-based company said today in a filing.
Chief Executive Officer Sheri McCoy has been cutting jobs and exiting markets as part of a plan to save $400 million by 2016. Avon also is reviewing operations in smaller, underperforming markets to be restructured or closed and in July sold its Silpada jewelry unit.
The company also said it would halt the further introduction of its service model transformation project, which includes an updated order-management system, after the initiative caused “significant business disruption” when it was rolled out in Canada. Avon said in a statement that it would have a pretax charge of as much as $125 million in the fourth quarter to write down the value of some software.
The shares fell 3.1 percent to $17.27 at 9:45 a.m. in New York. Avon had gained 24 percent this year through yesterday, compared with a 26 percent increase for the Standard & Poor’s 500 Index.
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